Dr. Elizabeth Cannon, the new President of the University of Calgary is photographed on Tuesday, February 01, 2011. In a ceremony in the capital Thursday, Cannon signed a partnership deal with industrial giant, Kerui Group.Chris Bolin/The Globe and Mail
The University of Calgary has opened a jointly-funded research centre in Beijing to collaborate with Chinese partners in the effort to unlock the country's vast potential for unconventional natural gas development as the Asian giant looks to reduce its dependence on coal.
In a ceremony in the capital Thursday, University of Calgary president Elizabeth Cannon signed a partnership deal with industrial giant, Kerui Group, as senior representatives from Chinese government, universities and energy companies looked on. The partners will fund collaborative research and training programs to improve the extraction processes for tight oil, shale gas, coal-bed methane, natural gas hydrates and oil-sands bitumen.
"The partnership with the Kerui Group is going to allow us to be on the ground in Beijing to develop and expand our partnerships not only with industry but with leading Chinese universities in the unconventional oil and gas space, which is a key area of expertise for the University of Calgary, Ms. Cannon said in an interview before departing for Beijing.
The goal, she said, "is to develop new innovative technology that we'll not only bring back to Canada, but will help China move from a coal economy over to gas through unlocking some of their unconventional oil and gas reserves."
China has the world's largest unconventional gas reserves, with 1,115-trillion cubic feet of technically recoverable shale gas resources, according to the U.S. Energy Information Administration. That compares to 802-trillion cubic feet in Argentina, 665 trillion in the United States and 573 trillion in Canada.
But the country has only begun to tap that resource, and it can be extremely challenging to develop. For the medium term, China is expected to remain a top customer for imported liquefied natural gas as it looks to rein in its reliance on coal in order to reduce city-choking smog and greenhouse gas emissions from its electricity sector.
China is looking at a national cap-and-trade program that would encourage conversion from coal-fired power to gas and other less-emitting sources.
The Canada-China energy relationship has faced some strains in recent years after the federal government imposed new hurdles to acquisitions by state-owned companies in the oil sands. The University of Calgary president said the collaboration with Kerui and other Chinese partners will help improve bilateral trust and cultural understanding.
Backed with $11.25-million from Kerui, the University of Calgary experts will come largely from its engineering and geoscience faculties. "This provides an opportunity to expand and to learn from the [unconventional] formations they have in China," she said, adding the knowledge is not only applicable in China but can be applied in North America and around the world.
University of Calgary petroleum engineer John Chen will be the first director at the Beijing research centre.
In an interview, he noted that conventional sources of crude oil and natural gas are rapidly depleting and the world is increasingly reliant on unconventional sources, which are technologically intensive and still in their early development in areas such as shale gas production and steam-assisted gravity drainage for oil sands extraction.
Mr. Chen is hoping to attract not only Chinese energy corporations but international ones to participate in research programs.
"The technological advances in North America heavily depend on the research we have done for the past 40 years," Mr. Chen said. "But the shale gas formations in North America and China are very different – the geology is different, the environment is different and the quality of the resources is very different."
"So we can not just move the technology from North America to China directly. We have to revise it; we have to see how to use it."